Key point

  • A recalibration of the issues to be considered when adjudicating on COMI in individual bankruptcy.

The Facts

Since 6 April 2016 debtors apply online to be made bankrupt, rather than petitioning the court. Their application is considered by an adjudicator who, if deemed appropriate, will make the bankruptcy order.

The present case concerned the application of Mr Budniok, a German citizen who applied for a bankruptcy order in England. After making two requests for further information, the adjudicator refused to make the order on the grounds that she was not satisfied, even after Mr Budniok’s request that she review the decision, that his COMI was in England. Mr Budniok appealed the decision.

Decision

The appeal was allowed. Registrar Baister found that, on the evidence, the debtor had adequately demonstrated that his COMI was in England and accordingly an order for bankruptcy was made.

Registrar Baister considered the evidence provided by Mr Budniok to be more than sufficient to satisfy a finding that his COMI was in England as he ‘has been carrying on the administration of his financial and consumer interests in this country on a regular basis since June 2014’. The Registrar noted that the time constraints levied on the adjudicator when it came to making a decision made it impossible to conduct an in-depth inquiry into the evidence. Further, it was unfortunate that there was no mechanism by which the adjudicator could refer specific question to the court.

The adjudicator had refused to make the order on the basis of suspicions she had about the legitimacy of arrangements surrounding Mr Budniok’s job and what she considered to be questionable activities of his employer’s corporate activities. Registrar Baister saw no basis for this suspicion and considered the adjudicator to have given too much weight to matters of little import.

Budniok v Adjudicator, Insolvency Service [2017] EWHC 368 (Ch)